Mayor aide in fraud probe
Ken Livingstone's regeneration adviser has stepped down after being arrested by police investigating an alleged £3 million fraud at a Docklands training agency, it was confirmed today.
Kumar Murshid has withdrawn from his responsibilities as a board member of the London Development Agency, the group set up to oversee the regeneration of the capital. He has been interviewed by police and bailed to return for further questioning.
The National Standards Board for England, the council's watchdog, has launched an investigation after he allegedly failed to declare his connections to a businessman at the centre of the police inquiry. He was also suspended from the Labour party in Tower Hamlets in east London, with two other councillors. He has been interviewed by police and bailed to return for further questioning.
Mr Livingstone would not rule out the possibility of reappointing Mr Murshid once the police investigation has been completed. He could not be certain if the investigation would be completed by June's London Mayoral elections.
He said: "If there are charges there will be no possibility of reappointment. We are in the hands of how long the police investigation takes.
"Kumar stood aside and that is right whilst the police investigation is going on. He is co-operating with the police and I am confident he will be cleared."
Mr Murshid told the Guardian: "I do not wish to in any way jeopardise Ken's election prospects and felt that I should therefore step aside for a temporary period until I am fully exonerated."
The police investigation was triggered by an auditors' report which alleges that a training agency, known as Millennium Advanced Technology Training (Matt), "was used as a vehicle for deception and the diversion of public funds to sources unknown, but not for the benefit of the local community".
The auditors claim to have uncovered "a web of related companies which could only be the basis of a bedrock of fraud".
Mr Murshid was chairman of a youth organisation which traded with Matt. Abu Ahmed, Matt's founder, denies fraud.
The standards board investigation into Mr Murshid related to his directorship of a company, known as Global 21, of which Mr Ahmed was also a director
